[Council Communication]  [Attachments]

Council Communication

Title:	Resolution Authorizing the Sale of Bonds for the Ashland Fiber Network
Dept:	Finance Department
Date:	July 20, 2004
Submitted By:	Lee Tuneberg, Finance Director
Approved By:	Gino Grimaldi, City Administrator

Synopsis:	This resolution authorizes and empowers staff to sell bonds to refinance AFN's internal and external debt. It follows a first reading of Ordinance 2909 on July 1 and second reading and signing on June 15 and a 30 day referral period ending July 15, 2004, with no petitions requesting referral to a public vote.
Recommendation:	Staff recommends approval of the attached resolution.
Fiscal Impact:	Enables the City to sell bonds replacing the existing debt including $7.5 million in bank loans and $7 million in interfund borrowing. The total amount of the bonds will include issue costs and extend the debt service over a twenty year period.
Background:	The debt restructure has been discussed many times at internal and public meetings and this is the next appropriate step in the accepted process for refinancing. Staff is still considering a negotiated sale rather than bid in that it will provide the City the most flexibility in getting the lowest rate and terms necessary to structure this debt to the City's benefit. Upon approval staff will: 1. Issue a Preliminary Official Statement. 2. Sell bonds in a bid or negotiated process. 3. Receive proceeds to liquidate outstanding debt and pay issuance costs. 4. Deposit remainder in Telecommunications Fund reimbursing for costs incurred for year-to-date operations, financing costs and in anticipation of related costs in FY 2004-05. The bond sale is expected for mid August. No further action will needed from Council. Staff will submit a report to Council in September on the sale disclosing interest rate, fees and the distribution of proceeds. Any budget adjustment caused by the sale will be presented to Council in October.
Attachments:	•   Proposed Resolution •   Ordinance 2909

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